Okay what will the US need to do to get out of this mess? The last long bull market was based on companies outsourcing goods/services, consumers borrowing and spending. (70% of US GDP is consumption) So what are we going to have to do to get the US back on track? The stock markets seem to be expecting a recovery soon but I do not see any unless I am missing something.
There is no way out. How does an individual get out of burdensome debt without hitting the jackpot or getting a massive raise? He first takes on more debt to pay off old debt by using credit cards... then the credit cards stop his ability to borrow more.. he no longer can even make minimum payments... then he defaults. The next step is a Bankruptcy, but nations do not have that luxury. Small nations may inflate until a collapse occurs and then go to the IMF - that happens all the time. But the US? It's too large for that solution - and the consequences to the world financial system too great. We also have the world's reserve currency and losing that status will kill our economy. So there is no solution - not in a human engineered sense. Just a natural unavoidable process that given political constraints and undue corporate influence, will play out on its own. It's rather obvious to me the end game. I've said it before, it's war, and a major one at that. I'm not the only one that thinks this, see about 3:30 in and thereafter... 5:20 is the best line: <object width="560" height="340"><param name="movie" value="http://www.youtube.com/v/FFhWIUTF1IM&hl=en&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/FFhWIUTF1IM&hl=en&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="560" height="340"></embed></object> Not all problems have solutions. Sometimes things just have to play out on their own. Look at Imperial Spain and her burdensome debts up until the major naval war with England, look at Weimar Germany, look at the Great Depression. Central Banking and fiscal spending weren't the solutions, they were the causes of economic distress. War was the solution. War cleans the slate. It redistributes power to the newly deserving or reinforces power to the current hegemon and gets him back on his feet. War remakes a new global monetary regime or gives the current monetary regime a second wind.
Shoot the bankers and jail the 'economists' who supported the expansion of 'consumer spending' and 'consumer credit'. Abolish unsecured lending. Period. Any loan given for any purpose must be backed with collateral at least 120% of the value of the loan. Cut the size of government at least in half, if not more. If a 'stimulus' plan is needed, give a million dollars to everyone who has an engineering degree from an accredited school, to invest. Don't let bankers or the general public (aka morons) get a dime. Manufacture *everything*. Everyone who has science skills that aren't needed for manufacturing, should be involved in R&D. Regulate banking as a public utility, similar to how water or electric utilities are regulated. The US stock market is absolutely delusional right now. The 'consumer' is not coming back. Not for at least the next decade or two. The only firms of value are those who have goods and services that are exportable to producing nations such as China. Boeing, ExxonMobil, Intel, etc.
There are three ways to get out of debt (from the perspective of the debtor): 1.) Pay the debt off. 2.) Default on the debt and do not pay it off. 3.) Kill or eliminate the lender -gastropod
It´s not just debt. Growth can´t continue if we start from zero anyway. Peak oil. So the whole system must be replaced i guess. Larouche might have the solution!? http://larouchepac.com
Let the banks die, if the government isn't willing to, then get rid of the government, depending on how they react to people wanting the banks gone. I don't think it will come to war personally if the democratic process is allowed to happen. Its when you have the rich morons and the politicians desperately clinging onto their wealth to the point they'll start a war over it that it gets ugly. Thankfully I don't think it's going to happen, the Audit the fed bill seems to have such a support from even Democrats that we may well actually see some peaceful removal of these bastards before long. It's a shame that all this started because a bunch of spoilt pricks couldn't take a loss due to their own stupidity, they give capitalism a bad name.
Nature will take its course.....which for the economy means US dollar depreciation/collapse. US is in a non sustainable fiat money expansion......its not going to be a pretty ending.
This seems obvious and is likely true... as you and so many others have noted. It surprised me, however, the level of aplomb which which it is stated. We should all be very concerned... in a PANIC perhaps... as the collapsed $USD = BANKRUPTCY for nearly ALL Americans. That's right... that's how it's going to end... BANKRUPTCY FOR NEARLY ALL AMERICANS... political revolution and perhaps worse to accompany. (Please... dumbass ETers... don't retort with "just trade".... you won't keep ahead of the devaluation bogey unless you make MILLION-BAZILLION PERCENT.)
I think peter schiff may well also have it right when he says that we should take our money to asia and invest in there instead. They actually HAVE money instead of nothing but debt so it may well be a wise move to put the money there until the U.S economy eventually gets back on its feet again.